What VC’s and Startups Can Learn from Soccer’s World Cup

Like millions of Americans, I watched the US–Belgium match last week in my Tesla Model S via custom Airplay sync from the WatchESPN app to my car’s dashboard screen.

But while average Americans are just starting to catch on to what the world calls “Futball,” we VC’s are paid to discover seemingly odd ideas ahead of their time. What others find offbeat or useless, we reward with billion dollar valuations. To me, the idea of 22 men with lots of hair gel faking penalties in matches of arbitrary duration is no stranger than a business based on ephemeral picture messaging or 140 character micro-blogging.

With this in mind, I’d like to share some insights that the startup community can take from from Brazil 2014.

Setting up Your Team – Tactical Formations and Startup Org Charts

One of the most important decisions a coach makes is setting his team’s tactical formation. Do you pick one most suited to the players you have, or do you make your players to adjust to the formation that’s strategically ideal? CEOs and board members face the same questions in organizing young companies. Here football structures can offer valuable insights.

For example, below on the left is the 4-4-1-1. It’s popular in the English Premiere league and is built for flexibility and response.

But if we rotate this 90 degrees to the left, BOOM, we now have an ideal org chart for an early stage B2B SaaS company. You have the flexibility to shift resources between sales, account, and ops as you grow. And in a rectangular office layout, a head of ops with good pace can sprint down the wings from a meeting with the CEO right down to the dev team.

soccer org2


 The Passion of a Leader – Mexican Manager Miguel Herrera

Miguel Herrera captivated a global television audience and spurred viral video storms with his sideline exuberance. Like many, I found myself rooting for Mexican goals just to see what might happen next in his celebrations.

Herrera-7 GIF

Leadership in tech startups is not just about technical innovation or sales, it’s about passion. When was the last time you celebrated a big customer win by tackling your VP of Sales and rolling around on top of him? Do people run from across the office to hug you like Herrera’s goalkeeper did from 50 meters away? If you want to win as a leader, this is the kind of passion it takes.

Bonus: Here the Men in Blazers express their love for Herrara and show some of his greatest moments (starts about 1:31 in)

Erratic Behavior Can Be a Factor – Louis Suarez and Biting

In high pressure situations, individuals can crack and do extreme things.  In one of the World Cup’s oddest stories, Uruguay striker Louis Suarez actually bit an opposing player, earning himself a 4 month suspension.

Startups are pressure cookers too, and strange incidents can take place. In one company I invested in, the Head of Sales used to dump iced coffee on underperforming inside sales reps as the end of the month approached. In another, the CFO did actually bite the VP of Engineering when an AWS bill arrived and hosting costs had tripled.

Founders Taking Money off the Table – Ghana’s $3M Payday

Compensation and contracts are an integral part of modern sports. Fans practically need an accounting degree to understand sports pages full of salary caps and transfer fees.

money duffelDisputes over money can spring up at critical moments. Ghana’s team was owed appearance fees and back pay and threatened to boycott their own match against Portugal. President John Dramani Mahama was forced to dispatch a plane with $3M in cash to fly to Brazil to pay them.

The lesson for VCs is to make sure interests are aligned between investors and management and avoid hold-up situations around key events like a funding round or acquisitions. I can empathize with President Mahama – I remember swallowing my pride and quietly parking a new Lexus in an entrepreneur’s driveway at 3am to keep a merger deal on track.

(As for Ghana, I question whether announcing publicly that $3M in cash in duffel bags is being delivered into urban Sao Paulo is the most prudent way to move money, but I’m sure the 50-year-old retired mall cop on Ghana’s security detail can handle it.)

Sometimes it Just Comes Down to Penalty Kicks

It seems brutally unfair to make it all the way through qualification to the World Cup, play 90 minutes of regulation, then 30 minutes of extended time, only to have your fate determined by a random series of single player vs. goalie penalty kicks.

Believe it or not, the same thing can happen in the game of Venture Capital. Last year, my firm was competing to invest in a hot startup led by a successful serial entrepreneur and it had come down to us and another leading VC in the Valley (I won’t name them, but let’s just say there are some beautiful national parks in California with very large trees).

We were all gathered in my firm’s offices for the final decision. The founder was a big soccer fanSAMSUNG DIGITAL CAMERA and as we looked on in amazement, he pulled a portable soccer goal out of his suitcase, set it up at one end of our conference room, and declared that we would pick an investor based on myself and the lead partner from the other firm competing on penalty kicks.

I winced as the first ball caromed off the wall, smashing our 108” Flatscreen and then shattering my signed picture of me, Steve Jobs, President Obama and Lady Gaga, but my adrenaline was pumping and now all I cared about was winning.

After nine kicks and about $40,000 in damage, I was up by one, and just had to make my last shot for the win. I wiped the sweat off my brow and my mind went back to a casual game of ping pong at the 2009 AllThingsD conference where this same rival had shown a strong tendency to his left. I let my eyes dart in that directly, but then blasted a kick low and to the right – the deal was mine.

Is that an odd way to decide a tech investment? Maybe. But startup life and soccer are strange, and they’ll be holding a World Cup in 110 degree heat in Qatar in 2022.

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